Company Number: 13115990

Analysis Date: 2025-07-29 19:41 UTC

1. Risk Rating: HIGH
   Mendy Crays Ltd exhibits significant solvency and liquidity concerns, primarily evidenced by persistent negative net current assets and net liabilities, despite holding considerable investment property assets.

2. Key Concerns:

• Negative Net Current Assets: The company shows net current liabilities of approximately £357,630 as of January 2024, indicating cash flow constraints and potential difficulty meeting short-term obligations.
• Persistent Net Liabilities: Shareholders’ funds are negative (£-17,782), reflecting accumulated losses and an erosion of equity, which poses risks for ongoing financial stability.
• High Secured Debt: The company carries a bank loan of £316,061, secured and repayable after more than five years, which adds financial leverage and interest obligations that must be serviced despite current liquidity challenges.

3. Positive Indicators:

• Investment Property Asset Held at Fair Value: The company’s primary asset is investment property valued at £655,909, which provides a tangible asset base that may support refinancing or sale if necessary.
• No Overdue Filings: The company is current with its annual accounts and confirmation statement filings, indicating regulatory compliance and good governance in maintaining statutory requirements.
• Profit Improvement: The company recorded a profit for the year of approximately £3,019, reducing accumulated losses, which may suggest modest operational improvements or rental income stability.

4. Due Diligence Notes:

• Investigate the nature and terms of the secured bank loan, including interest rates, covenants, and repayment schedule to assess refinancing or default risk.
• Review the cash flow statement or bank statements if available to confirm liquidity position and operational cash generation, given negative working capital.
• Clarify the source and sustainability of rental income or other revenue streams supporting the investment property valuation and profits.
• Confirm if there are any contingent liabilities or off-balance-sheet obligations that could exacerbate solvency risks.
• Assess directors' plans or strategies for improving liquidity and addressing negative equity, including potential capital injections or asset disposals.